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Water bills in Auckland City will rise by 115 per cent over 10 years, figures issued yesterday by the council-owned water company Metrowater show.
Confirmation of the doubling of water bills follows a month-long battle by the Herald to nail down Metrowater and the Auckland City Council about the effect of a new water policy on 142,000 households and businesses.
A Herald calculation last month showing a 140 per cent rise in water bills over 10 years was criticised by council finance general manager Andrew McKenzie as incorrect and couched in sophistry.
He would confirm only figures from last year showing a 52.6 per cent increase.
Now, papers obtained by the Herald under the Official Information Act show the cumulative effect over 10 years is 115 per cent.
Water bills will rise by 9.7 per cent, 7.9 per cent, 10.8 per cent and 6.2 per cent over the next four years based on the scenario used by the Metrowater board on April 23 to set the 9.1 per cent increase.
Chief financial officer Stana Pezic told board members the 9.1 per cent increase "may be unpalatable to customers and other stakeholders".
The papers also show that council finance committee chairman Vern Walsh was warned last year by Metrowater chairman Michael Stiassny about significant price increases.
In a letter to Mr Walsh on March 28, Mr Stiassny said Metrowater was assessing the effect of price increases from the region's bulk water supplier, Watercare.
"Clearly the magnitude of the increases proposed by Watercare will result in a significant price increase to our customers," Mr Stiassny said.
Council finance general manager Andrew McKenzie received a similar warning about significant price increases from Watercare in a March 23 letter from Metrowater chief financial officer Susan Putt.
The matter led Metrowater to withdraw its draft funding plan.
Four weeks after the warnings, the council sought public submissions on a new water policy, telling ratepayers the effect on water bills "will be small in the first 10 years".
The water policy, part of a 10-year budget, attracted only 12 submissions.
Mr McKenzie said yesterday the council approved the draft budget for comment on March 8 and March 9 before the Metrowater warnings about Watercare were received.
He said the budget document was completed by March 28, and the draft budget was committed.
Mr McKenzie said that when Watercare withdrew its funding plan, Metrowater did not know how much Watercare's cost increase would be or how it would handle it.
Because of the low increases forecast in the then-current funding plan, "the judgment made was that the small price increases was probably still an accurate characterisation of those changes", he said.
Mr McKenzie said Watercare costs were one of several factors contributing to Metrowater price rises.
In the first two years of the new water policy, low Watercare price increases had little effect on Metrowater costs.
Main factors in these costs included inflation, the dividend to the city council, water demand and unaccounted-for water, he said.
Susan Putt, who has left Metrowater, told the Herald it would not take a rocket scientist to work out that higher prices from Watercare would lead to higher water bills.
Asked if alarm bells should have rung with the council that price increases were going to be more than small, she said "yes".
The council's decision last year to increase water bills to produce $280 million in dividends over 10 years has resulted in price increases of 9.6 per cent and 9.1 per cent in the first two years, sparked a fierce debate and led to a change of heart for many councillors.
On Thursday, Parliament's local government and environment select committee will investigate water pricing in Auckland in response to a petition by the Water Pressure Group.
The council's submission to the select committee said it had always used the most up-to-date information on Metrowater's future pricing paths in its public documents.
Water prices were estimated to increase by "just over 100 per cent over the next 10 years", the council said.
Metrowater commercial business manager David Simpson said the latest figures were "indicative only" and Metrowater believed it could reduce them.
Last year, Metrowater forecast a 3.85 per cent rise in water bills for this year; the year before, its forecast was a 4.3 per cent rise.
The increases were 9.1 per cent and 9.6 per cent respectively.
Metrowater is to make its latest funding plan and forecast price rises public today.
